Referrals, By the Numbers: 38:40

You’ve probably heard that getting new business through referrals is a Good Thing. I never really understood how good until I attended an educational preview class for the Certified Networker training program down in Toledo, Ohio on Friday. The presenter, Debby Peters (also, my mom), had a great visualization to put everything in perspective.

I’ll do the best I can to recreate it without the whiteboard.

Imagine you have a line marked out with the numbers from zero to ten. Zero corresponds to someone whom you have just come in contact with who has no knowledge of you, let alone any trust in you. Ten represents a level where they are ready to make a decision about your product or service. In other words, they know and trust you.

Of course, actual numbers will vary from individual to individual. For purposes of this example, however, imagine for every notch you move someone along that line, it takes an hour of your time.

Now, you meet someone at a networking event, or make a cold call, or run into them at the gym. They’ve just met you and have no trust in you. They are at a zero. You now have your work cut out for you. It’s going to take ten hours of your time to get them to the point that they are ready to make a decision.

Let me ask you this: After all that work, is every person you get to that decision stage actually going to buy from you?

Probably not. Let’s face it. Most of us would be pretty happy to have even one in four agree to close a deal. Assuming that’s the case, again, for purposes of this tutorial, it will take, on average, about forty hours of work to make a single sale.

Now let’s take a look at referrals.

When I say referrals, I’m talking about well-qualified recommendations by people who are in your inner circle. They themselves know and trust you and know your business so well that they know who your preferred clients are. In short, the referral isn’t “You should talk with Bob Smith. Here’s his number.” This is more along the line of “I talked with Bob Smith yesterday and, after hearing some of the stuff he is dealing with right now, I told him that he really needs to work with you. Let’s set up a meeting so I can introduce the two of you.”

With such a well-qualified referral and a personal, face-to-face introduction, where do you think you will start on that scale of zero to ten? I’m thinking closer to nine. That means it will take about an hour of your time before they will be at the decision point. Also, since your referral partner has already discovered that this person has a need for your services, you are probably much more likely to close a deal. I’d say closer to three out of four.

That means, on average, you’ll work for an hour and twenty minutes per sale when you are prospecting through referrals from your inner circle.

So, what could you do with the other thirty-eight hours and forty minutes?

Maybe work on building your network?

Photo credit: Yaroslav B

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About Greg Peters

Greg Peters, president and founder of The Reluctant Networker, LLC, is a business networking specialist. He works with trade associations on both the local and national level to create a culture of better connections and greater opportunity. Find out more at www.TheReluctantNetworker.com or gpeters@thereluctantnetworker.com.

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